Property tax

What do you need to consider with Property Ownership?

There have been many changes to the taxation (Stamp Duty Land Tax, Capital Gains Tax, Income Tax, Corporation Tax) of property ownership, as the Government tries to discourage the ownership for both individuals and businesses.  There are further changes planned in the coming tax years and others currently in consultation (PPR changes to ancillary reliefs – ends 1 June 2019).

Obtaining professional property tax advice before buying or selling a property to ensure you mitigate your taxation liability can save you thousands of pounds.  One recent exercise we carried out for an individual showed by selling a property 1 day later could result in an additional £20k of taxation.  Timing is often therefore vitally important.


How to Purchase in Property considering Taxation

Many individuals have started to purchase buy-to-let properties within a company and are therefore seeking property tax advice. The move away from personal ownership was mainly due to the mortgage interest restriction being phased in from the 17/18 tax year and will be in full effect for 20/21. Should you buy a property as an individual or in a company? The answer is “it depends on your circumstances”. Our property specialist tax accountants are here to help.

There are many pro and cons of holding properties individually and in companies. With a ‘no one size fits all approach’, our specialist tax advisers can assist you with making an informed decision. You should always seek professional advice before purchasing a buy-to-let, as with the 3% stamp duty surcharge it can be expensive and prohibitive to change the ownership afterwards. It is also important to seek professional tax advice in advance of selling your property.

There are also many tax reliefs available (Stamp Duty Land Tax, Capital Gains Tax, Income Tax, Incorporation) when purchasing and disposing a property. These can be utilised to help mitigate any potential tax charge, so the sooner you seek specialist property tax advice the potential greater tax saving could be had.

How to save Property Tax

We at Rawlinson Pryde & Partners are able to either undertake a property portfolio review or offer property tax advice before you make a property purchase or disposal. We have already advised several of our clients resulting in them saving much more taxation than our fees in year 1.

If you own a property with a married partner or civil partner, we can assist you with changing the ownership to reduce your tax charge.

If you are selling a property you may wish to consider the timing of this to make use of your annual exemptions and tax bandings.

We have also produced these 2 helpful guides relating to property taxation on individuals. We plan to produce a further guide for limited companies.


Techniques to reduce Property Taxation

Depending on your circumstances there are ways to carry out some property tax planning, whether prior to buying a buy-to-let or after buying.  We would always recommend you get advice in advance of arranging finance and buying a buy-to-let as after obtaining finance it can be restrictive and costly to undo.

Techniques to reduce property taxation can include:

  1. Transferring between husband and wife.
  2. Forming a Partnership or Limited Liability Partnership (LLP)
  3. Using a Limited Company and this could include incorporating an existing business using the Ramsay case

There are benefits and drawbacks to each opportunity but with our Chartered Tax Advisers we will be able to assist you with coming up with property tax planning advice. It is imperative to obtain property tax planning advice in advance of a transaction click here to contact us.

Property Developers and Property Investors

Some of our largest clients are in property development or are property investors who have a large portfolio of properties.  We do not just look after the larger clients, we have many smaller clients or those who are just starting out.

We are able to assist you with ensuring you structure your business affairs to consider your potential exit, tax (Corporation Tax, Capital Gains Tax, Income Tax, Stamp Duty Land Tax) and VAT implications.